LUXEMBOURG- European leaders expressed confidence on Friday that new austerity measures planned by Greece would be enough to pull the country out of its debt crisis and make any bailout unnecessary.

Greek Prime Minister George Papandreou received political support but no promise of financial aid at talks in Luxembourg with the chairman of the group of countries that use the euro, before a meeting in Berlin with Chancellor Angela Merkel.

The Greek parliament passed a bill including many of the government's latest austerity measures as Papandreou began his diplomatic tour, but his government faced new protests and police used teargas against stone-throwing youths in Athens.

The (Greek) measures are strong and tough. The commitments taken by the Greek government are clearly paving the way to an exit out of the situation Greece is in, said Luxembourg Prime Minister Jean-Claude Juncker, the influential chairman of the 16-nation Eurogroup of euro zone finance ministers.

I think we were right when we said ... we stand ready to take coordinated and determined action if action is needed. I don't think that action will be needed.

Merkel offered moral support, telling a conference in Munich: We should stand helpfully by Greece's side.

But a spokesman for the chancellor said her meeting with Papandreou later on Friday would be about offering political support and not financial aid.

The German government does not intend to give a cent, German Economy Minister Rainer Bruederle said.

Although EU leaders have backed the austerity plan, which includes an estimated 4.8 billion euros (4.3 billion pounds) in pay cuts, tax rises and a pension freeze, a poll showed three-quarters of Greeks oppose it and the government faces a new strike by trade unions on March 11.

The latest moves have also had a limited impact on financial markets although Greek hopes of ending its crisis got a boost from Thursday's 5 billion euro 10-year syndicated bond, which was more than three times oversubscribed.

Greece's debt agency chief said most of the bond deal was placed outside Greece, showing foreign investors' readiness to buy Greek debt at high yields.

The spread between Greek government bond yields and those of benchmark German Bunds narrowed on Friday to about 290 basis points, but are still about 70 points higher than they were two months ago.

The current spread over Bunds is hardly a sign of market confidence in Greece's debt sustainability, said Marco Annunziata, chief economist at UniCredit Group.

The EU should put its money where its mouth is and pledge concrete support to Greece. And it should do it now.


Athens needs to borrow 53 billion euros this year -- at least 20 billion of it by the end of May -- to repay existing debt and cover its huge budget deficit.

The euro's credibility is threatened, and leaving Greece to fend for itself could unnerve markets further. Problems could then spread to other euro zone states such as Spain or Portugal -- a scenario that would deepen the crisis in the euro zone.
Despite the Eurogroup's reluctance to provide financial assistance, it wants to avoid Greece turning to the International Monetary Fund for help because doing so could be seen as a sign of weakness.

Juncker told a news conference Greece had not asked for financial aid and added: Greece is not thinking about asking for financial help.

Papandreou goes to Washington next week for talks with U.S. President Barack Obama but an IMF spokesman said the Greek leader had not scheduled a meeting with the organisation. His diplomatic tour also takes him to Paris, a big EU power.

Witnesses said police used teargas to disperse stone-throwing youths and scuffled with other protesters during the latest protests in Athens.

Private sector union GSEE announced a strike for March 11 and public sector sister union ADEDY said public workers would also stop work that day. The two unions represent about 2.5 million workers, half of Greece's workforce.

An opinion poll carried out by Public Issue for Skai TV showed about three-quarters of 530 people surveyed in Greece disapproved of the government's moves. But 78 percent believed there was a high probability all the government's moves would be implemented.

Underlining continuing uncertainty over Greece's ability to carry out its promises, European Central Bank member Mario Draghi said the new measures would need to be monitored so that they were successful and long lasting.

Of course, we need now to monitor their implementation to ensure that this success stands throughout in the future, he told reporters.

(Additional reporting by Athens, Brussels and Berlin bureaux; writing by Timothy Heritage; editing by Noah Barkin)